Week 4 Day 2: Salient Features of GST

Objectives:

 To comprehend the students on the characteristic features of Goods and

Services Tax.
 To help the students in understanding the working mechanism of Goods
and Services Tax.

The salient features of GST

Important features of GST are listed under:
 GST is an indirect tax applicable on “supply” of goods or services.
 It is a value added tax liveable on goods or services or both and it is not origin based tax.
 It is a destination based consumption tax.
 In India GST is working on the concept of dual model which means both the central and
state governments are levying tax on the common base. The tax levied by central
government is known as CGST, the tax levied by states and union territories (UTs) are
known as SGST/UTGST.
 For the transactions taken place between two states or the state and UTs are known as IGST
(integrated GST). This tax is exclusively collected by central government.
 For the Import of goods and services it is difficult trace the supplier because he is outside
the country in such a case it is deemed to be treated as interstate supplies and on imports
IGST is levied along with applicable customs.
 The tax rates on CGST, SGST /UTGST & IGST is mutually agreed by both state and
Centre under the guidance of GST council.
 The new indirect tax i.e., GST replaced the following central taxes which were existed
since from independence are Central Excise Duty, Additional Duties of Customs which
was commonly known as CVD), Service Tax, Cesses and surcharges etc.,
 State taxes were also merged GST which is VAT, CST, purchase tax, luxury tax, entry tax,
entertainment tax etc.,
 This tax is applicable to all goods, services except for alcohol for human consumption and
petroleum products
 There are five petroleum products which are applicable for levying GST from the date in
which GST council will recommends are crude, petrol, diesel, aviation turbine fuel and
natural gas.
 On tobacco still excise duties are levying, but these are also subject to GST but for the time
being compensation are being levied.
 The exemption threshold limit for levying CGST and SGST is:
I. Up to Rs. 20 lakh for the states other than special category states.
II. Up to Rs. 10 lakh for the special category states.
 For small tax payers there is a composition scheme in which tax will be paid at a flat rate
without credits having annual turnover up to Rs. 1 crore and Rs. 75 lakh for special category
states enumerated in article 279A. But now this limit is raised to 1.5 crore.
 The minimum number of exempted goods and services is listed and which are same
throughout the country.
 Any supplies made in the nature of exports and supply made SEZs and SEZ units are Zero
rated.
 Any tax paid on the inputs is claimed against the output tax in the prescribed manner of the
GST Act 2017.
 Returns must be filed electronically on the different dates prescribed for different persons.
 Tax can be paid in various alternative modes of payment such as internet banking, through
debit/credit card, through National Electronic Funds Transfer (NEFT) and Real Time Gross
Settlement (RTGS)
 There is a provision of a self - assessment system of the taxes payable by the registered
person.
 For the purpose of verifying the compliance with the GST regulations, there is a necessity
of conducting of Audit of documents of registered persons.
 The person who defaults in making the payment of tax from him arrears of tax can be
recovered through detaining of sale of goods and services, movable and immovable
property of him.
 There is a statutory body for revising the provisions, rates and settling the disputes of tax
between the central and state government which popularly known as GSTC (GST council)